The problem is access to liquidity. People do do it themselves, but they can only trade very small amounts of money and thus make only a little return (albeit with pretty limited risk). If you have a good brokerage account (like most prop firms) or are a bank you can essentially trade for free. Your brokerage account will only charge you for the overnight holding as the cost of capital (you get charged transaction costs but no need to buy leverage). So, firms with a good amount of capital can use their balance on a brokerage account and who do not have overnight holding (common for these strategies) essentially don't need capital to trade.

Its just how much you want to scale. Also, if something goes wrong, you can lose your capital very quickly. An easy risk to cover for a multi-strategy prop firm, but it could sink an independent trader. I've spoken to a lot of these guys, and a new strategy mysteriously losing 1MM+ in a couple minutes is pretty common.

Back to access: The types of connections these firms have to exchanges are very expensive. If you dont have the scale necessary to cover 10k per month per connection than you can't compete with all of the other players in the market. Then it goes down to execution speed, colocation, etc - those are the things that make non-bank prop firms like Tradebot or Getco successful. The strategies are only a part of the equation, the trading systems are what really separates the pack.

Most of these firms have way more developers than traders, and the developers they have would make Google jealous.